Suppose that the supply and demand for blenders in a small open economy are given by:

P=174-2.1Q (demand)

P=30 + 2Q (supply)

a) what is the autarky quantity of blenders produced?

b) assume that the world price for blenders is $60.If this country opens its market to free trade, what are its quantity supplied, quantity demanded, and quantity of imports?Show all your calculations.

c) suppose that the country imposes a quota of 8 units.Find the new price after the quota is imposed.Compare this new price to the world price.How much does price rise after imposition of the quota?What are quantity supplied, quantity demanded, and amount imported with the quota?Show all your calculations.

d)Graph the Supply and Demand curves.Be sure to label everything including the axes, the autarky price and quantity, and the intercepts for both the price and quantity axes.Then show the world price and the quantity supplied, quantity demanded and amount of imports you found in part b.Then add the quota from part c.Label the price with the quota you found in part c.Also be sure to label quantity supplied, quantity demanded and the amount imported (the quota) from part c.

e. After the quota in part c is imposed, how has domestic welfare been affected?(Assume all quota rents go to domestic producers and calculate a value for the change in TOTAL welfare between the free trade outcome and the quota outcome.)Show all your calculations.

f. Suppose instead of the quota described in part c that this country negotiates a VER of 8 units with its chief foreign supplier. What are the welfare effects of this policy? (Calculate a value for the change in TOTAL welfare between the free trade outcome and the VER outcome).Show your calculations.